Food Lion to Buy 62 Stores in the Southeast

Image courtesy of Food Lion

Food Lion, of Salisbury, N.C., has agreed to purchase 62 BI-LO or Harveys Supermarket stores in North Carolina, South Carolina and Georgia from Southeastern Grocers, of Jacksonville, Fla. The 46 BI-LO stores and 16 Harveys Supermarkets will remain open under those brands until they transition to the Food Lion name, from January to April 2021.

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Southeastern is also selling its distribution facility in Mauldin, S.C., to Food Lion affiliate ADUSA Distribution LLC, with the handover expected to take place in the first half of next year. No financials on the transaction were disclosed.

The average size of the stores is about 44,000 square feet, a Southeastern spokesperson told Commercial Property Executive. Only two of the stores, both of them in Georgia, are owned; the rest are leased, according to a Food Lion spokesperson. Most of the stores are in located neighborhood shopping centers: 38 stores are in South Carolina, 22 are in Georgia and just two stores are in North Carolina.

Southeastern Grocers announced separately that it will no longer operate stores under the BI-LO name and will focus on its Fresco y Mas, Harveys Supermarkets and Winn-Dixie brands. Southeastern stated that it’s exploring its options for the 61 remaining BI-LO stores.

The company is also divesting assets of 57 of the in-store pharmacies it operates under the BI-LO and Harveys Supermarket banners to CVS and Walgreens. These locations include all of the BI-LO pharmacies and nine Harveys Supermarket pharmacies in Georgia.

A troubled recent past 

More than 20 years ago, Food Lion was the nation’s first grocery retailer to establish a partnership with the nonprofit Feeding America to develop a retail food rescue program. Every Food Lion store is paired with a local feeding agency to receive donations of food that is unable to be sold in its stores but is perfectly safe to eat. Food Lion President Meg Ham confirmed that the new stores too will be paired with local food banks.

Food Lion operates more than 1,000 stores in 10 Southeastern and Mid-Atlantic states. It’s part of Ahold Delhaize USA, the U.S. division of Zaandam, Netherlands–based Ahold Delhaize.

After BI-LO filed for Chapter 11 bankruptcy in 2009, Ahold Delhaize predecessor Delhaize Group made a bid to acquire about $425 million of the company’s assets. Later, however, BI-LO parent Lone Star Funds provided $350 million to restructure BI-LO, which emerged from bankruptcy in 2010.

Lone Star created Southeastern Grocers in 2013 as the new parent company for BI-LO, Harveys and Winn-Dixie. In 2018, Southeastern itself filed for Chapter 11, a situation that was analyzed by attorney Phillip Hudson, of Saul Ewing Arnstein & Lehr LLP, for Commercial Property Executive.